CDL Hospitality Trusts - Maybank Research 2023-11-01: On An Even Keel; broad-based Operational Improvement

• CDL Hospitality Trusts (SGX:J85)’s business update indicates strong top-line growth in 3Q23 y-o-y, led by recovery in travel. RevPAR grew in most markets; Singapore rose by high teens, led by higher room rates.
• - Read this at SGinvestors.io -
• We lower our DPU estimates and reduce our target price for CDL Hospitality Trusts by 16% to S$1.05 after factoring in higher interest expense and cost of equity, but maintain BUY rating on CDL Hospitality Trusts due to continued growth and reasonable valuation vs peers.

RevPAR continues to grow

• CDL Hospitality Trusts's 3Q23 gross revenue rose 19.7% y-o-y to S$70.1m while NPI of S$39m was up 23.3%.
• - Read this at SGinvestors.io -
• Growth was aided by continued recovery in international travel. Barring Australia and Germany, RevPAR grew in all the other markets on a y-o-y basis in 3Q23 in local currency terms. Australia and Germany were impacted by seasonality and the absence of one-off events.
• Singapore 3Q23 RevPar rose 19.6% y-o-y, led by higher room rates while occupancy slipped by 1%. Compared to 3Q19, RevPAR for Singapore hotels grew by 32.6% on a same-store basis.
• In the UK, its second key market in terms of NPI, RevPAR grew 6.5% y-o-y in 3Q23 despite a fragile economy.

Higher cost of debt, investments on track

• Read more at SGinvestors.io.

Krishna Guha Maybank Research | https://www.maybank-ke.com.sg/ 2023-11-01 SGinvestors.io

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